For plan sponsors, accepting the status quo on plan fees can have consequences on your employees’ future. You have options from low-cost index funds to more expensive actively management choices. And unless the more expensive choices you offer perform better to offset their higher management, consulting, insurance, and/or sales fees, the impact is that your employees will earn less in their investments and will accumulate less in their accounts, all other things being equal.

The consequences of your evaluations are real and meaningful. Quite simply, your employees’ may have to work longer, work part-time in retirement, or accept a lower standard of living in the future. Maybe some of your employees would have done that anyway – however, aren’t most of your employees hoping for financial flexibility in their future?

Imagine what would occur if, by virtue of some poor management decision, all employees at your employer received an across the board pay cut of 5 to 15%? How would that go over?

So, unless you can justify the additional management and other miscellaneous costs – meaning they provide value for what you and your employees’ pay for them – we believe you are much better off providing your employees an array of low-cost index funds. This gives them the best chance to get as close as they can, over the long run, to reaching financial independence.